August 15, 2022


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Brief analysis of stock trading

2 min read
Stock Analysis - Overview, Uses, Types, and Assumptions

Stock market is one of the biggest avenues for wealth creation. When someone buys the stock of any company, he becomes the owner of the company. They are called shareholders. Shareholders receive the dividend regularly. In 1602 the Dutch East India Company started modern stock trading in Amsterdam. The stock market crashed many times such as 1929 great depression, Black Monday of 1897, 2008 financial crisis and now in 2020 in a corona pandemic situation and onwards.

How to trade in the stock market:

Stocks trading means the buying and selling the stocks of a company. To understand it in detail one has to understand the concept of primary market and secondary market. Primary market is the place where companies issue securities and launch in the market for the public. Secondary market is the place where traders buy and sell the shares which are launched in the primary market. 

How to beginners starts stock trading:

One needs to open a demat account if he wants to be a trader or investor. In the brokerage account investors can hold their security.. One needs to understand the movement of the price of the stocks. Through enhancing knowledge he can understand the appropriate price for entering or exit in a trade. To ensure profit making in trade one needs to decide the right bid and ask price. One needs to acquire fundamental knowledge of the stock. Traders have to know how to mitigate the possibility of loss making. It will be helpful if investors can take some advice from the expert who is proficient about volatility of the market.

Is trading stock gambling:

Investment in the stock market is not a gambling. Both are associated with the risk and try to maximise profit. Gambling is not stock trading and vice-versa.

Types of stocks:

There are various types of stock available in the market. They are growth stocks, dividend or yield stocks, new issues and defensive stocks.

How the stock trading works in the market:

The enlisted company’s stocks in the exchange market can be traded through the secondary market. The stock brokers or brokerage firms work as an intermediary of buying and selling the stocks. The broker places the buy order in the stock exchange and the exchange seeks the sell order for the same share. Once the buyer and seller are being fixed then price is being finalised for the transaction.  Within this period, the stock exchange confirms whether the parties are defaulter or not. Stockbrokers can recognise their clients by a unique code. After the completion of the transaction, the stockbroker issues a contract note which gives the details of time of transaction, and date of the stock at All rights reserved. | Newsphere by AF themes.